“If the relationship between price and unit sales is inverse, market price is considered ‘elastic,’ ” Numo lectured.

“Wouldn’t every product have an elastic price?” Lucy asked. The rest of the tribe was thinking the same thing.

“Often, but not always,” Zoot said. “We don’t need to look beyond our own company to find an example of an ‘inelastic’ pricing in action.”

“For the first couple years of FEI’s history, we were the only fire vendor around. Prometheus could’ve charged anything he wanted,” Numo explained. “FEI had a monopoly on fire and buyers were willing to pay almost any price for what they—correctly—perceived to be a valuable service. With little correlation between price and units sold back then, fire pricing would’ve been considered very inelastic.”
Join us next week as Marka, Zoot, Numo, Org and the gang complete their discussion of the second P: Price.